Operating in Greenland

Political and Economic Environment

Stable democracy: Greenland is a modern, democratic, and politically stable society, strongly associated to Denmark in areas including foreing policy, common currency, jurisdiction and defence.

Population: Most of Greenland‘s 56,000 inhabitants live along the south-western and southern coasts. The capital is Nuuk with a population of approx. 13,000. The main languages are Greenlandic and Danish but English is freely used in business dealings. About 90% of the population is born in Greenland; the remainder comes mainly from Denmark.

Logistics: All towns south of and including the second largest town Sisimiut enjoy year-round shipping services byRoyal Arctic Line. There are daily flights to Denmark byAir Greenland and scheduled flights to Iceland (Fig. 7.1). There is a well functioning tele-communication system including a GSM mobile net Tele Greenland.

Oil and Gas Exploration Policy

Licensing policy: There is a strong national consensus that Greenland‘s oil and gas potential should be developed in order to diversify the economy. To stimulate exploration activities, a licensing policy has been issued including the announcement of a licensing round in 2002. Furthermore, an open door procedure for the other areas is in force.

Simple application process: The Government of Greenland's Bureau of Minerals and Petroleum deals with all companies applying for exploration licenses in Greenland in a "one-door" process, normally making it unnecessary for applicants to contact other departments within the Greenland and Danish governments.

Licensing terms: Licences are granted on terms very similar to the well-known terms applying in countries around the North Sea. Guidelines for application procedures, model licences etc. are available atBMP's web site.

Taxation regime: The overalltaxation regime for hydrocarbon exploration and production in Greenland is favourable. Specific terms have been announced for the Open-Door areas, and for the Licensing Round areas, these are announced in theLetter of Invitation.

Physical Environment

Geography: Greenland covers an area of 2.16 mill. km2, of which 410,500 km2 (slightly more than the size of California or Sweden) is free of ice. Greenland stretches from 60°N to 82°N  a distance of almost 2500 km  and climate is thus very variable along the Greenland coast.

Sea ice and icebergs: Within the Licensing Round areas on the south-west coast, the climate is mild arctic, strongly influenced by the tail end of the warm Gulf Stream (Fig. 7.2), which keeps winter temperatures above 20°C (-4°F). Most of the area is navigable all year round (Fig. 7.3).

Experience from the 70s and from summer 2000 shows that icebergs are not a major problem for neither seismic acquisition nor drilling activities. In the 70s, there was no registered down-time due to ice problems. In summer, 2000 when icebergs were present in the Fylla licence area, actual down-time due to icebergs problems was as low as 33 hours (Fig. 7.4).

Wind: Greenland waters are often perceived as having some of the most harsh weather conditions on Earth. This is, however, not true. Although storms can be strong, both wind and wave conditions in the Licensing Round areas are generally less severe than those encountered in e.g. the northern North Sea and in the Faroes-Shetland region (Fig. 7.5).

Data reports: Two extensive data reports on the environmental conditions of the West Greenland offshore areas are available on CD-ROM from BMP and summary reports based on these data have also been published. A report on iceberg distribution in the eastern part of the Davis Strait has been prepared by theGreenland Survey (Asiaq) and theDanish Meteorological Institute